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Robinhood CEO Vlad Tenev on tokenizing stocks, expanding access to private shares, fintech's future | All-In Podcast | YouTubeToText
YouTube Transcript: Robinhood CEO Vlad Tenev on tokenizing stocks, expanding access to private shares, fintech's future
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Robin Hood's CEO, Vlad Tenev, discusses the company's significant growth, its innovative approach to financial services through tokenization and blockchain technology, and its ambition to become a comprehensive financial platform for younger generations, while also touching upon the broader implications of AI and advanced mathematical reasoning.
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I am Vlad Tennv, the founder of Robin Hood.
We're talking about Robin Hood. The
stock's more than doubled since its last report.
report.
>> It stock surged 180% this year after
nearly doubling in 2024. The
>> shares of the trading platform now up
more than 400% in the last year.
>> Glad your presence there speaks volumes.
Robin Hood Gold, which hit a record 3.5
million subscribers. Most financial
services get worse the more money you
have, but we wanted to kind of invert that.
that.
>> Ladies and gentlemen, please welcome
Robin Hood CEO Vlad Tenner, [Music]
[Music]
>> my guy.
>> Good to see you, brother.
>> Good to see you.
>> Good to see you.
>> You're the reason Jake Health's here. I mean
mean
>> I mean it is a great story.
>> It's so true. Jake Cal bumbles into
eight shares of Robin Hood. Lad builds a
hundred billion dollar companies. It's unbelievable.
unbelievable.
>> I mean people know me for the Uber
investment which four or $5 million
valuation. But there's
>> When do I flip that?
>> Well, yeah, it's going to take a little
more. I think you got 20x left to go. But
But
>> wait, was JL the third or fourth
investor in Robin Hood? It was $20
million valuation, but it's a good
story, I think, because you hadn't
launched. And we're at Antonio's
Nutouse. I went for a drink with my
friend Ado. He brought his college
roommate, Elon. We're hanging out at
Antonio's Nut House in Palo Alto. Rest
in peace, Antonio.
>> Keep dropping these names. One second.
>> So Vlad comes over. We we Vlad and I
knew each other a little bit. And Vlad
pitches me on this idea and he says,
"Um, I'm a quant." I said, "What's a
quant?" He said, "Quant analysis." I
said, "Yeah, I heard of it. Um, hit me
with the idea." And then he goes, "Is
that Elon Musk?" I said, "Yeah, just hit
me with the idea. I know you got a
startup." He says, "Well, I I want to get
get
uh this generation, these millennials,
these Gen Z's. I want to get them to
trade stocks." I said, "Love it. They
don't care about like getting a driver's
license. They they don't they're still
on their mom and dad's Netflix. You're
going to try to get people who don't
care about the future to trade stocks?"
He says, "Yeah." I said, "What's the
business model?" I said, "This is the
best part. We're going to let him trade
for free." So I said, "Okay, let me
repeat this back to you, kid. You want
to get a group of people who don't have
any interest in the future to trade
stocks and then
>> we have 30 seconds.
>> You're going to make money. You're going
to make money.
>> Thank you, Vlad."
>> I said, "I'm in. I'm in."
>> Not only that, but he said, "This is
probably the best idea you'll ever have."
have."
>> I did say that to him, too. I was like,
"This is the best idea. What if it
works?" And here we are 10 years later.
what's worked.
>> And last week you were added to the S&P 500.
500.
>> I was
>> last week or yesterday? Two days ago.
>> It was Friday.
>> I mean, what a huge accomplishment.
>> Thank you.
>> I mean, I think I think it was cuz I
rejected you for a job, right?
>> It you heard about that.
>> This is a series.
>> Thank you guys for upgrading me, by the
way. I guess that that's been the best
part of being added to the S&P going
from just a Jason interview to to the
whole squad.
>> We were doing the rehearsal yesterday
and everyone wanted to do the the
interview, so we said, "Let's all do it together."
together."
>> Why don't we all get in here? Can I uh
let's let's maybe start. So look, you've
built an incredible business. Um there's
a part of it that looks like the you
know what comes after the Erades of the
world etc. But there's an enormous other
part of your business and there's all
these emergent paths. I want to just
start by double clicking in something
that you announced a few months ago in
France and maybe you want to talk us
through it what the goal was. You got a
lot of support but you got a lot of
blowback as well. There was a lot of
people that were like, "Wow, this is a
little too disruptive tokenizing these
stocks, putting them on the blockchain."
Maybe talk us through the business and
then just double click on that narrow
thing so we can understand what you're
up to.
>> Yeah. So, we had an event in in the
south of France that we called to catch
a token. And the idea behind that event
was we wanted to show what Robin Hood,
the app, the platform would look like if
it was built from the ground up on
crypto technology. So what that looked
like was stocks on blockchains. Uh
obviously we added a bunch of
cryptonnative features like pers. Um we
launched in now 31 countries. And then
uh we also wanted to demonstrate to the
US what the power of putting traditional
financial services on blockchains was.
And to me, I think a lot of people talk
about 24/7 stock trading, instant
settlement, these things that do have
real value, but I think the most
powerful thing is taking inaccessible,
illlquid assets and making them
available. And and so we we were
actually, I think, the first to tokenize
OpenAI and SpaceX and we made that
available to our retail customers in
Europe in the form of a giveaway. and
and that was very very exciting, you
know, not not without its controversy,
but I felt like it was such a powerful thing.
thing.
>> How do you do it? How did you enable that?
that?
>> It's actually very similar to uh
stablecoin in a way. So, if you're a
stable coin issuer, and this it's a
little bit oversimplifying, but you can
think of it as we keep some dollars or
treasuries in a bucket over here. uh we
mint and burn tokens against that bucket
but back at one to one and the tokens
can actually trade publicly on a variety
of of blockchains. So it's just
extending that token that that
tokenization concept from stable coins
to uh public and and private.
>> So you had to go and secure your own
block of SpaceX and OpenAI stock and
>> and then put it somewhere. Were the
companies okay with it? Um, it depends.
Uh, I think I think that, uh, I'll say a
couple of things. Um, I think a lot of
people are okay with it in principle,
but if you're a company and you're
focused on your mission like OpenAI is,
and you hear about some new thing, uh,
it's kind of a distraction. So, I I
don't really blame them for tokeniz
tokenization or private access not being
their their top priority, but I did want
to be the first to tokenize open AI. So, uh
uh
>> did Sam give you a call?
>> Uh I have had a couple conversations
with with Sam before and after.
>> Um cuz yeah, he's a spicy individual.
What was his take? Did he tell you to stop?
stop?
>> Um I think that actually uh I I'd like
to think we get along quite well. I
think he understood why we were doing
it. Again, the distraction aspect when
they have so much going on uh is is a
real thing. But at the end of the day,
>> where do you take it from here? Are you
going to go and get 50, 100 of these
well-known private companies? Is that
the goal? Is it every private company?
How like what do you do from here to
build on top of it?
>> Yeah. So, we we've been hard at work
trying to figure out how to do it in the
US. I think that's that's uh everyone's
interested in that since the France
announcement. obviously expanding what
we do in Europe as well and there will
probably be different mechanisms in the
US and and in Europe at least for some
time but uh yeah you you should expect
that we go bigger and deeper into the
space and have plenty of things to do in
the future.
>> I'm curious what the relationship has
been with the new administration. the
last administration, you know, was not
very pro- innovation, crypto, and now
you got David uh running that
specifically. How has the change in the
administration changed how you look at
innovation at Robin Hood? And then Sax,
I'm sure you have some follow-up
questions here.
>> Yeah, it's been very positive. I mean,
just uh by nature of how many times I've
been to Washington, uh the last administration
administration
didn't invite me to the White House
once. Uh, I asked for meetings and they
wouldn't even meet in person. They were
all working remotely uh until I think
2023, early 2024. Um,
>> it was funny how remote work kind of
broke down along political lines. It's
sort of like the the Republicans wanted
to get back into the office.
>> I think you're referring to remote work
as not working.
>> I mean, that is uh I wasn't going to say
it, but uh yeah. Um,
yeah, it was funny how that works out,
but it's it's been very positive. I
mean, last administration,
we were playing a lot of defense. It was
just sort of like one enforcement action
and we had a wells notice and all
aspects of our business were sort of
under assault. So I think the most
direct thing was when that went away, we
had to think, okay, well there the
administration now wants to work with us
rather than just trying to attack us
from all these angles. And for a while
we didn't even know how to operate in
that environment because we were just
completely not used to it.
>> Yeah, you were on your
>> Have you met with Elizabeth Warren?
>> Uh I have not. No, I just receive
letters from time to time. But
>> she really But she hates you. Well, I
told me personally, she really can't
take it.
>> No, the reason the reason I asked is
what is the core motivation of the idea
of we need to enforce, we need to kind
of restrict, we need to prohibit. Is it
consumer protection that the belief is
that systems like yours that are more
open, more accessible, more usable, more
consumers will trade more and
potentially lose money and therefore
they have to try and play a role in
restricting consumer access to these
markets and these marketplaces. and
that's what they're mo ultimately kind
of driving towards or do you think that
there's something more vested
interestwise that's motivating?
>> I mean I think I think there's probably
both. Certainly consumer protection is
the stated reason but obviously these
folks have funders and backers and lots
of interests. I mean there's powerful
there's powerful financial services
companies in the state of Massachusetts.
So, I don't know what's happening behind
the scenes, but you know, I do think the
consumer protection angle is what
they're kind of
>> pulling out. How do you Yeah. How do you
look at this type of innovation and your
role at the White House to support it
and to foster it while still, you know,
having some rules on the field?
>> Well, I think Vlad's uh vision around
tokenization is very exciting. I like
you wrote a oped I think it's in the
Washington Post that I thought was very
good on this this topic. We now have a
regulatory framework in place the Genius
Act which the president signed in July
that creates um the the the the set of
rules for stable coins which are just
tokenized dollars. And like Vlad's
saying if you can tokenize a dollar you
can tokenize anything. You just
basically create a reserve of that asset
in a secure account at a bank somewhere
or a broker and then you mint tokens on
a onetoone basis. So I think it's very
exciting is there's no reason why we
can't tokenize. Let's start with public
securities. I think that's the easy case
because with public companies there's
already disclosure requirements. There's
an abundance of information and anybody
can buy a public security, right?
Because of those disclosure
requirements. Um and the companies don't
really care who their stockholders are,
right? I mean because they know that the
public owns these securities. So what we
could get right away with tokenized
securities, public securities is like
you were saying a 24/7 global
marketplace uh with instantaneous
blockchain based settlement and that
could be really exciting. There's no
reason why trading has to be on this
like 9-to-F5 exchange with all this, you
know, we could enable stocks to trade as
easily as you, you know, transfer a a
stable coin. Now the private security
part is interesting that that is I think
more complicated because first of all
the companies like you're saying they do
care who their shareholders are and they
do generally restrict those things and
that's why you probably got the phone
call from Sam and then the regulators
care also because there's not as much
public disclosure. So they there's more
uh of an impetus to protect the public.
By the way I'm not saying we can't get
there on private securities. Um about a
decade ago a ago I founded
a startup to tokenize uh real estate
called Harbor and we were just way too
far ahead of the curve but that that was
basically to to um tokenize uh private
real estate securities. So I think we
can get there but I think the place to
start that would be really exciting
would just be like let's do the public
securities first because it's easy or
easier from a regulatory standpoint and
then we can work our way into private.
>> Yeah, it's certainly easier
technologically. I mean, we we've we've
made both uh available to some extent in
the EU. Um I think private could be more
meaningful long term and I I'll I'll
tell you why I think so. If you look at
the technologies that are transforming
society right now and that we feel so
optimistic about over the next 5 years,
it's AI and to some extent, you know,
space exploration. And I think with AI
in particular, there's a lot of fear
right now. I mean, you talk to a random
person on the street, more than half the
time, they're a little bit nervous about
what AI is going to do to them. Now,
imagine the scenario if you know 20 to
30% of someone's net worth is in AI
companies. Now, suddenly they're not
fighting against this thing. They want
it to succeed because if AI succeeds
>> entrepreneurship as a way to let more
people participate in the boom.
>> Yeah. Because I worry about the status
quo. I mean these AI companies in
particular are getting into valuations
of hundreds and hundreds of billions
with zero retail ownership. And that
technology could completely disrupt you
know how normal people live their lives.
And we actually expect it to drive that
sort of disruption because if if you
look at Cathy's presentation, you know,
you're talking about negative inflation,
high GDP growth rates, giant
productivity improvements. I don't think
you're going to get there without some
significant labor force disruption.
>> Okay. So what do you need from let's say
the US government broadly whether it's
the SEC or whether it's maybe new
legislation on Capitol Hill what what
exactly do you need to bring about this revolution?
revolution?
>> I think I think uh relaxation of
accreditation uh standards towards more
self-certification. you you mentioned uh
a test. Um I think a test I consider to
be one form of self-certification,
but the simplest form is just someone
saying, "I understand the risks. I
understand I could lose 100% of what I
put in this investment." You could even
put like a skull and crossbones.
>> No crying in the casino.
>> Yeah, exactly.
>> You could put somebody crying in the
casino. Yes. >> Yeah.
>> Yeah.
>> Literally in the app.
>> No crying in the casino. I think
>> I guess I mean the point you're making
is you can't on the one hand cry for
access and on the other hand cry in the casino.
casino. >> Exactly.
>> Exactly.
>> Can't do that.
>> But the executive order on 401k access I
think was a step in the right direction.
So we could also ease into it by
extending that to individual retirement
accounts which are great short-term
vehicles and then give it to
>> you need a secured interest. Why can't
you just create a synthetic or like a
fast contract saying if and when open AI
goes public cuz you can see how many
shares there are. You know what the
legal registration of the corporation
is. Can't you create like a synthetic
contract that just trades the value of
the stock and ultimately needs to settle
at some point after the company goes public?
public?
>> We can't do that currently. Uh and and
OpenAI in particular is a tricky one
because yeah, pick any other LLC or C or
something, right? Um but yeah, we're
we're continuing to look at all angles,
but I I think some clarity would be helpful
helpful
>> because this is the whole value of of
like sorry Chimat, but like futures
markets and prediction markets is you
can effectively create a synthetic on
some underlying without actually having
ownership or a secured interest in the
underlying or delivery of the commodity.
You could basically just say when this
thing goes public, it's above 20 bucks a
share, below 20 bucks a share on some
number of days after something like
that. But I mean I guess one one
question for you is is that where
prediction markets can take us?
>> So um the the difference within with
prediction markets is you can create a
prediction market but it has to have an
expiry date for the contract. So for
example we have a prediction market live
on the platform now about which
companies are going to IPO. You could do
something like that. There have been
prediction markets uh in the past, not
on our platform, but some other
platforms that make a market around the
IPO price, but if you just want exposure
to underlying equity in a private, I I
don't think we can do that.
>> How do you think about, you know, the
one criticism people have had, which is,
hey, we have got a young generation.
They're frisky. They want to take all
this risk. They want to bet. and your
responsibility as a platform that is
giving that access if you're the on-ramp
the education you give and and I
remember with the options and people
being able to short you you came up with
an incredibly elegant solution when you
try to short something you give people a
test you give them education in that
moment before they do it so so how do
you think broadly about young people
getting into wagering they're playing
cards you know they're they're betting
on fantasy football and doing sports
betting, but they also want to, you
know, have their hand in crypto and in
puts and calls and and and pretty
sophisticated stuff. So, what's your
responsibility as a platform then in
introducing them to those sophisticated
>> um ways of betting and investing?
>> I have a lot of thoughts actually when
uh you interviewed me for a job in uh
2008, which by the way was the only it
was one of two like final job interviews
that I got. Most people just rejected
me. I never even got a call from from uh
from Google or any of the others, but uh
it was either Weather Bill, later
Climate Corp, uh or Optiver, where I
interviewed to be an options trader. Um
so I got very very close.
>> We had a math team.
>> Yeah, I got very close.
>> Was he like in the interview?
>> He you probably don't even remember.
>> You remember Alex Machulka? Yeah, I
think he was uh he >> um
>> um
>> I forget my recruiter's name, but that
guy was great. Anyway, um and then I
became an entrepreneur. So uh it might
not surprise you to
know that me personally uh I'm I'm sort
of like adverse to control on the level
of risk that I would take because my
entire career path was sort of like
maximally levered bet on one company
which is the one that I started.
>> Um so I would be reluctant to discourage
people from being entrepreneurs to doing
what they want to do with their money or
time. Of course, I'm I'm in favor of
like reasonable things like you should
it should be clear to you what you're
investing in. Um but yeah, generally
speaking, I think if it's available to
wealthy people, high netw worth
individuals, it should be made available
to retail as well.
>> Let me broaden the conversation. Um it
used to be historically we would have
banks, we would have brokerages, we'd
have payment processors, we'd have
merchant acquirers. They were all
disagregated. They could all be public.
they could all build thriving companies.
Now with stable coins and everything
else, there's this creeping convergence.
You're issuing a credit card. Coinbase
has a credit card. SoFi has a federal
banking license. Stripe just launched a
new L1 called Tempo.
Everybody's competing with everybody.
Tell us the scope of where you think
Robin Hood goes in the next four or five
years and what the financial landscape
and infrastructure looks like. The
Visas, the Mastercards, the JP Morgans,
what roles do these companies play as
you guys just become more and more
ambitious and girthy and big and you
know market cap and all that stuff.
>> Yeah, I think the industry goes through
periods of consolidation and then
divergence. I think Robin Hood has a
unique advantage which is that our
customers put an increasing amount of
their dollars into Robin Hood. So what
we're thinking about and and it became
pretty clear to us as soon as we rolled
out our second product. We kind of saw
what happened. Customers spent more time
on Robin Hood. The two products help
each other. So for example with
retirement we noticed you know the big
question was well if we launch
retirement is it going to cannibalize
the core brokerage business but what we
saw was the opposite. If someone opens
up a retirement account they they tend
to actually increase the amount they put
in their individual account and we saw
that again with the credit card. If
they're a credit card primary user top
of wallet they actually put more money
into into Robin Hood. So then that gets
us to a future where we ask ourselves,
can we be your comprehensive financial
platform? Can you put your direct
deposit into Robin Hood? Can you put all
of your money into Robin Hood? Can you
get to gold subscriber premium status as
soon as possible? And then can we get
all of your family members onto Robin
Hood as well and your kids? So yeah, I
don't think anyone's really thinking
about it from that angle, but I think
that there's going to be over 130
trillion that changes hands from silent
generation and baby boomers to younger
people. And and I think Robin Hood's
actually very well positioned to be one
of the, if not the number one primary
institution that benefits from that
transfer. We've got over a quarter
trillion assets on the platform already,
which seems like a a big number, but
it's actually just a drop in the bucket
compared to what's going to happen.
>> Where do you see the JP Morgans and the
V Mastercards and Visas? How do they
compete with an elegant product with
hundreds of millions of users that just,
you know, the product velocity that you
have, the risk you're willing to take?
>> Yeah. I mean, I think that uh if if you
think about an incumbent, they have
certain benefits. They're like very
muscular from a regulatory standpoint.
Like they know how to deal with
regulators. They've got global scale.
They've got, you know, tens, hundreds of
millions of customers, lots of assets.
But the disadvantage is that they're
sometimes slow to adopt new
technologies. They don't have the best
engineering teams. They can't move very
fast. Um, and they they can't hire the
best talent. And and so I think that we
don't have those downsides. We have
great talent. We move really quickly. We
use the best technology. We haven't been
super acquisitive historically, even
though we're doing more. And that
prevents us from being bogged down by
these like massive integration things
that take multiple years. Um, and so
it's a question of can we get the
benefits of scale while also maintaining
the nimleness of a technology startup.
Do you want to give the audience before
we run out of time, maybe last question,
but tell them about the LLM you guys are
building? This is a different project
for you.
>> Oh yeah.
>> Um and the goal of that and why you
decided to fund that sort of outside the
scope of Robin Hood.
>> Yeah. So uh he's talking about Harmonic,
which is a company that I started two
years ago and I'm chairman of and uh
completely separate from Robin Hood. and
and basically the goal there is to build
what we call mathematical super intell
intelligence. So this is um mathematical
reasoning that is uh exceeding the
capability of any individual human
researcher. And we we had a pretty cool
result a couple weeks ago where we
announced gold medal level performance
at the international math olympiad which
is the biggest uh mathematics
competition in the world. And and I
think to my knowledge we were the only
formal model.
>> You're the only formal one that got IMO
gold. Yeah.
>> Yeah. So open eye and Gemini. Open eye Gemini
Gemini
>> uh did it with informal
>> uh Gemini's in formal model got a silver
last year.
>> Explain why it's going to be so critical
to have a a mathematical super
intelligence model.
>> Yeah. So two reasons. Um one that has to
do with how these models are trained and
the other which is more of a consumer
painoint. The thing that we've figured
out with formal is how to verify that a
statement is true very precisely. And
when you're doing reinforcement learning
of these models, having a strong reward
signal is very helpful because you can
just discard all the data that's not
helpful and train on the high quality
like correct data. And when you're a
user of these AI models, sometimes they
hallucinate. Uh and and this is actually
not just a consumer problem, but also an
enterprise problem because basically if
you're a software engineer using a
coding model, your job has has become
over the past couple of years, it it's
turned from writing a whole bunch of
high-quality code to reviewing LLM
generated code and making sure that
that's correct. So in a world where
you've got, you know, LLMs producing
thousands and thousands of pages of
code, human verification just doesn't
scale, particularly for backend. So we
want to solve that problem.
>> Okay, give it up for David Sax's second favorite.
favorite. [Music]
[Music]
>> Good to see you guys.
>> Thank you. Thanks, brother.
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